Planning commission recommends denying ban on on-site power generation for data centers, urges performance standards

The Provo City Planning Commission on March 25 unanimously recommended that the City Council deny proposed amendments to Title 14 that would remove on-site power generation as a permitted use in the data-center overlay zone and change related environmental-impact requirements.

Planner Hannah Sal told the commission the amendments were intended to address the city’s concerns about utility rates, grid load, air pollutants and water use. “Brief summary: they remove power generation as a permitted use,” Sal said, and staff described linked effects: a practical cap at about 50 megawatts because facilities above that threshold typically must provide their own generation under Utah Municipal Power Agency standards; retention of a 200-foot setback from sensitive properties while removing a 500-foot setback tied to on-site generation; prohibitions on discharge into the municipal wastewater system; and removal of some third-party air-quality reporting requirements over 5 megawatts.

The package drew a lengthy public comment from Jeff Chavez, CEO of Valition Industries, whose rezoning application is on hold. Chavez said the amendment would preclude his off-grid model using Bloom Energy fuel cells and estimated the project would bring about $1 billion in assessed value and $2.5–4 million annually to the city. “This amendment turns away then the exact kind of investment your own priorities say you need,” Chavez said, and asserted the fuel-cell technology is near-zero-emission and quiet.

Commissioners pressed staff and the speaker for independent verification of financial and emissions claims, and raised questions about the evolving technology landscape. Commissioners also debated whether a categorical prohibition was the right tool. Several members said a clear prohibition would be simple to administer and would satisfy council’s preference for a bright line on generation; others warned a blanket ban could push investment to neighboring jurisdictions and argued for performance-based rules or conditional-use review to allow proven low-emission approaches.

After discussion, the commission moved to recommend denial of the text amendments with an attached recommendation asking the council to consider performance-based standards or other mechanisms that would allow well-documented, low-impact projects to be evaluated. The motion passed unanimously.

What happens next: the commission’s recommendation will be forwarded to the City Council for its consideration. Staff told the commission that, if the council still wants tighter language, the commission’s suggested direction is to return with a more complete package that defines performance standards and addresses changing technologies.

Key details and staff clarifications

- Thresholds and limits: staff said a 50-megawatt threshold is tied to Utah Municipal Power Agency (UMPA) practice; anything above that tends to require on-site generation under UMPA arrangements. The proposal would limit on-site generation per site and would retain a 200-foot setback from sensitive properties while removing a 500-foot generator-linked setback. - Water and cooling: the amendments would require non-evaporative cooling measures and prohibit discharge of data-center process water to the municipal wastewater system. - Reporting: staff recommended removing the requirement for third-party environmental analysis for data centers over 5 megawatts because, without on-site generators, consultants said there would be little for them to analyze; instead, staff said much of the review can be done in-house.

Commissioners noted community concerns about noise, water use and air emissions and asked for clearer metrics and community-benefit considerations if the city wants to allow some data-center development. The commission’s denial recommendation asked the council to pursue standards that can adapt to new technologies while protecting public health and municipal infrastructure.